co-signer on a home loan question/predicament, help!

amother

Wine

Wed, May 13 2015, 12:43 pm

A family member has offered to be our co-signer so we can get a mortgage on a first home. DH works a cash only business now. However he should be finishing school soon and with the degree hopefully he'll get a salary paying job that we'll be able to pay a mortgage and qualify on our own.
The family member said only after we signed con this home, that he's doing this co-signing on condition that we refinance in a few years so that he doesn't have to be on this loan for the rest of his life or tied down to it. Essentially it will be helping us for now but he cant be on it for the duration, only for a few years till DH gets a job that would qualify us for a mortgage.

First quesion: how much generally does it cost to refinance ur mortgage? Do you have to pay full closing costs all over again? I am a little bothered that this family member only told us after the fact about this contingency to co-signing.

2nd question: We are looking into mortgage rates and there is one called ARMS rates that locks us in to a small percentage rate for 5 years and after that it's unfixed and flexible. DH wants to use that kind so that for now we'll be paying a small rate, and when we refinance when we have to anyways, it'll probably be around the same time the fixed amount is up - does this sound like a good idea? Is there any problems you can see arising with this kind of plan?